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The European Union comes in for a lot of criticism, including around these parts. Not all my colleagues have been so critical. Still, burdensome regulations by an unaccountable bureaucracy would trouble any libertarian. 

But this article in the Washington Post reminded me of the original promise of the Common Market, which grew into the European Union:

The degree to which the European Union’s post-nationalist vision has transformed the continent is evident in the German region of Saarland, an area of 1 million residents hard on the French border. 

The region — marked by lush forests, gentle hills and rich coal deposits that once made Saarland an industrial jackpot — has changed hands eight times over the past 250 years. In the past century alone, it was traded between France and Germany four times.

The first of those came in the aftermath of World War I, when France claimed the territory as compensation for German destruction of France’s own coal industry.

Germany lost the land again after World War II and only got it back in 1957.

As recently as the 1990s, the nearby border was subject to strict controls. But today, it’s largely invisible. French citizens commute to Saarland for work or pop by to buy a dishwasher. Germans cross Saar into France for lunch or to pick up a bottle of wine. French — the language of the longtime enemy and occupier — is part of the fabric of Saarland, and it’s welcome.

“We’re neighbors. We’re friends. We marry each other. One hundred years ago, we killed each other. It’s been a great evolution,” said Reiner Jung, deputy director at the Saar Historical Museum in the region’s capital, Saarbrücken.

Of course, countries could drop their trade barriers without creating a supranational bureaucracy. But too many people misunderstand economics and believe giving up their trade barriers is a cost, so creating a customs union, a common market, or even a European Union may often be the only way to get the substantial benefits of free trade. And frictionless trade is even harder to achieve without multinational negotiations. So there are pros and cons to arrangements such as the European Union, but we shouldn’t underestimate the great benefits of commerce and movement across national borders.

There is a heated debate in Malaysia these days on whether the country should affirm the International Convention on the Elimination of All Forms of Racial Discrimination, or ICERD. Adopted by the United Nations General Assembly in 1969, the internal convention calls for eliminating all legal structures that favor one group over another. 

Malaysia is among a handful of countries that have neither signed nor ratified the treaty. One major reason is that many within the country’s ethnoreligious majority, the Muslim Malays, do not want to lose the privileges they have over the non-Muslim minorities such as the Chinese or Hindus. The Islamists also feel alarmed that accepting legal equality will lead to more freedom of religion, freedom of expression, or the intermarriage of Muslims and non-Muslims. 

Free Malaysia Today, a popular newssite with liberal tendencies, asked me what I think. I encouraged Malaysians to accept ICERD, and gave a reference that even the Islamists could not easily reject: The Ottoman Empire, the very seat of the Islamic Caliphate. Here is how Free Malaysia Today reported my take:

Mustafa Akyol, an award-winning author on contemporary Muslim issues, said Muslim groups who oppose the International Convention on the Elimination of All Forms of Racial Discrimination, or ICERD, should study the policies of past Islamic powers including the Ottoman caliphate with regards to equality.

“I would recommend that all those in Malaysia who oppose the ICERD on Islamic grounds read the Ottoman Constitution of 1876. It reads:

‘All subjects of the empire are called Ottomans, without distinction whatever faith they profess… [And] All Ottomans are equal in the eyes of the law. They have the same rights, and owe the same duties towards their country, without prejudice to religion.’”

The full story is available here: ”The Caliphate had ICERD, too

On December 6th, 2018 the Herbert A. Stiefel Center for Trade Policy Studies will host a full-day conference entitled, “The Jones Act: Charting a New Course after a Century of Failure.” The purpose of this event is to shine an analytical spotlight on the Jones Act, a nearly 100-year-old law that restricts the transportation of cargo between two points in the United States to ships that are U.S.-built, crewed, owned, and flagged.

While supporters of the law claim the Jones Act is essential to ensuring a robust U.S. maritime industry capable of providing a ready supply of ships and qualified sailors in times of war and other national emergencies, both the number of ships built in the United States and U.S. sailors to crew them have been in a steady decline for decades. Not only has the Jones Act failed to deliver its promised benefits, it has also imposed a variety of different costs on the U.S. economy. This conference will examine these costs in greater detail, address the validity of the Jones Act’s national security argument, and evaluate options for reform.

As part of the conference, each of our participants will submit a short essay on a particular aspect of the Jones Act. These essays will be made available here as they are submitted by our speakers, and will be reproduced in expanded form after our conference. We encourage you to read, share, and provide feedback on these essays.

This event is part of our broader Project on Jones Act Reform, which seeks to raise awareness about the Jones Act and lay the groundwork for the repeal or reform of this outdated law. We hope you will visit our project page and join the discussion on Jones Act reform.

Reserve your spot to attend our event next month, read the conference essays, and be part of the conversation. We hope to see you there!

This month I’m participating in a Cato Unbound symposium on Child Protective Services and family rights. In its lead essay, attorney Diane Redleaf details some of the ways in which CPS agencies can arm-twist parents into so-called interim placements and safety plans that separate families with little or no judicial review.  Participant James G. Dwyer, in a response essay, takes a relatively positive view of the agencies’s work. My essay, by contrast, generally backs up Redleaf’s critique of CPS as a species of government enforcement agency gone wild: far too often, these agencies seize children from parents based on flimsy evidence, second-guess everyday parental behavior and decisions, or act on misguided Drug War zeal. 

Redleaf in her essay then goes on to raise distinctive objections about how the agencies negotiate with parents before a judge has ruled on their cases, which I paraphrase thus: 

…what sorts of policy response should apply to agencies’ practice of proffering to parents ostensibly voluntary interim placements and “safety plans”? What happens when parents regret—the next month, or the next day—having agreed to those conditions? Can they reopen the concessions they made, and how? Does it matter whether the agency has withheld information from them or menaced them with worst-case scenarios?

In my response essay, I argue that the problems with these practices are real but that legal attack on the voluntariness of interim plans is likely to be of at best limited helpfulness because our courts follow a strong presumption of enforcing settlements as written. More promising in the long run, I argue, may be to impose direct obligations on agencies to respect families’ autonomy without attacking the settlement process as such. “Safeguarding every family’s rights will, as one of its benefits, shore up families against unwise surrenders of their rights.”

 

 

Most information on Border Patrol activities along the border come from data that has already been aggregated and compiled by Customs and Border Protection (CBP), Border Patrol’s parent agency.  We acquired the Border Patrol microdata for every apprehension on the Southwest Border from September 1, 2014, through August 31, 2015.  That period adds one month from the end of the 2014 fiscal year and chops off the last month of the 2015 fiscal year.  The microdata allow us to answer specific questions about Border Patrol apprehensions that aren’t otherwise displayed in tables by CBP.  This microdata identifies an individual’s time and date of apprehension and release, which allows us back out how long they were held in Border Patrol custody. 

There is wide variation between the number of hours that illegal immigrants apprehended by Border Patrol on the SW border stay in detention based on the region of the world where they are from (Table 1).  Caribbean illegal immigrants spend an average of 61 hours in detention, but there were only 561 of them detained in 2015. 

But the most striking numbers from Table 1 is the standard deviation column.  The standard deviation measures the dispersal of the data points.  If the standard deviation is low, then the data points are all clustered about the mean.  If the standard deviation is high, the data points are spread out over a wide period.  The standard deviation for the number of hours spent in detention for Central Americans and Mexicans is about two to three times greater than the next highest standard deviation, respectively.  This is likely because of the large number of asylum claims made by Central Americans and Mexicans in 2015. 

 

Table 1

Hours Detained on SW Border by Country of Origin

Region of Origin Average Number of Hours Standard Deviation Number of Illegal Immigrants Caribbean 61.06 40.92 561 South America 47.51 32.25 4,548 Central America 44.13 105.53 130,156 Oceania 37.87 30.55 3 Asia 37.61 23.63 4,309 MENA 37.10 29.33 151 Europe/Canada 36.54 53.17 529 Mexico 35.65 144.89 186,547 Africa 23.34 28.05 56 Other/Unknown 14.72 12.36 6 All 39.26 128.31 326,866

Source: CBP Microdata.

 

Table 2 shows how many hours immigrants spend in detention by the border sector where Border Patrol apprehended them.  There’s no correlation between the number of hours an illegal immigrant is held for with the border sector in which they were apprehended, even controlling for the number of Border Patrol agents by sector.

 

Table 2

Hours Detained on SW Border by Border Region of Apprehension

Border Sector Average Number of Hours Standard Deviation Number of Illegal Immigrants Laredo 65.97 72.13 35,509 Big Bend 52.71 236.44 4,492 Rio Grande 41.06 86.95 145,493 San Diego 35.00 89.30 26,415 Del Rio 31.07 313.42 18,294 Yuma 29.81 118.89 6,633 El Paso 29.80 261.71 14,046 El Centro 28.88 66.67 12,615 Tucson 28.52 104.15 63,369 All 39.26 128.31 326,866

Source: CBP Microdata.

 

Altogether, illegal immigrants apprehended along the SW border spent over 12.8 million hours in detention in 2015 – equal to about 1,464 years of detention.  If the daily cost of maintaining a guarded bed in Immigration and Customs Enforcement (ICE) detention facilities is the same as the cost for those detained on the SW border, then it cost over $50 million in 2015 to detain those 326,866 people for more than half a million days.  

Welcome to the Defense Download! This new round-up is intended to highlight what we at the Cato Institute are keeping tabs on in the world of defense politics every week. The three-to-five trending stories will vary depending on the news cycle, what policymakers are talking about, and will pull from all sides of the political spectrum. If you would like to recieve more frequent updates on what I’m reading, writing, and listening to—you can follow me on Twitter via @CDDorminey.  

  1. Today, Senator Rand Paul will take the floor to call for a vote on blocking arms sales to Bahrain—one of the countries waging war on Yemen. Senator Paul will be invoking the congressional oversight function included in the Arms Export Control Act (AECA). I’ll be watching the vote and covering its results on Twitter @CDDorminey. If you want more information on the conflict in Yemen, check out my colleague Emma Ashford’s work. For background on arms sales and congressional oversight, flip through the Risky Business report Trevor Thrall and I published earlier this year. 
  2. Incoming HASC Chair: Scale Back Plans for New Nukes,” Marcus Weisgerber. Representative Adam Smith is poised to become the House Armed Services Committee chairman and aims to “totally redo the Nuclear Posture Review” during his tenure. Cost is a motivating factor that Rep. Smith says the current plans haven’t taken seriously enough: “When you look at the needs we have in national security, the needs we have in the country and the $22 trillion debt, what they’re talking about in terms of totally rebuilding a nuclear weapons capacity in all pieces of the triad is way beyond what we can afford.” 
  3. Here’s what the Pentagon thinks the actual cost of a Space Force will be,” Aaron Mehta. Deputy Secretary of Defense Patrick Shanahan spoke to reporters this week and significantly decreased the government’s estimate of starting a Space Force. While the Air Force claimed it could cost as much as $13 billion, Shanahan’s team claims it can keep costs to the single digit billions, possibly as “low” as $5 billion. 
  4. Providing for the Common Defense,” National Defense Strategy Commission. This new report discusses the findings of a congressionally-mandated study on the 2018 National Defense Strategy (NDS) and a wide variety of emerging national security threats. The authors call for a vague yet drastic increase in defense spending, claiming it is out of their purview to estimate how much implementing the 2018 NDS will actually cost—just that current resource levels are insufficient. 

As I have written many times before, the opioid prescribing guidelines put forth by the Centers for Disease Control and prevention have been criticized for not being evidence-based. This has even caused the Food and Drug Administration to begin the process of developing its own set of guidelines.

In publishing the guidelines, the CDC emphasized they were meant to be suggestive, not “prescriptive,” pointing out that health care practitioners know their patients’ situations better than any regulators and should therefore individualize their prescribing to meet their patients’ unique needs. 

That has not prevented the majority of states from implementing opioid prescribing guidelines that place limits on the dose, amount, and length of time that doctors can prescribe opioids—usually restricting the dose of opioids to a maximum of 90 MME (morphine milligram equivalents) per day. According to the National Conference of State Legislatures at least 30 states have implemented such guidelines. These guidelines have caused many health care practitioners to return to the undertreatment of pain for which they were criticized in the 1980s and 90s. And it has driven many chronic pain patients to desperation as their doctors abruptly taper their pain medication or cut them off entirely.

The American Medical Association has gently criticized the misinterpretation and misapplication of the CDC guidelines in the past. Now two and a half years after the CDC published its guidelines, the AMA has taken a more adamant stand. This week, at the AMA’s interim meeting in Maryland, its House of Delegates resolved:

RESOLVED that our AMA affirms that some patients with acute or chronic pain can benefit from taking opioids at greater dosages than recommended by the CDC Guidelines for Prescribing Opioids for chronic pain and that such care may be medically necessary and appropriate. 

RESOLVED that our AMA advocate against the misapplication of the CDC Guidelines for Prescribing Opioids by pharmacists, health insurers, pharmacy benefit managers, legislatures, and governmental and private regulatory bodies in ways that prevent or limit access to opioid analgesia.

RESOLVED that our AMA advocate that no entity should use MME thresholds as anything more than guidance, and physicians should not be subject to professional discipline, loss of board certification, loss of clinical privileges, criminal prosecution, civil liability, or other penalties or practice limitations solely for prescribing opioids at a quantitative level above the MME thresholds found in the CDC Guidelines for Prescribing Opioids.

Sadly, the opiophobia-driven policy train left the station long ago. As an eternal optimist, my initial reaction is to think, “better late than never,” and to hope this new resolution will cause policymakers to reconsider their misguided policy. But the cynical voice inside me responds with a more negative cliché: “a day late and a dollar short.”

 

 

 

New data from the U.S. Citizenship and Immigration Services (USCIS), the agency that adjudicates immigration applications, show that denials have jumped significantly. The data for the first nine months of Fiscal Year (FY) 2018, which started in October 2017, show that denials for all manner of immigration benefits—travel documents, work permits, green cards, worker petitions, etc.—increased 37 percent since FY 2016.

As Figure 1 shows, the denial rate increased from 8.3 percent to 11.3 percent from FY 2016 to FY 2018. These statistics exclude citizenship applications and include all other immigration forms except for the Deferred Action for Childhood Arrivals and Temporary Protective Status programs, because they provide status to illegal immigrants, and President Trump has tried to cancel them almost completely. But the trends are similar regardless.

Figure 1: Denial Rate for Immigration Applications
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Figure 2 details the number of denied applications by year, with the FY 2018 projection based on the first nine months of the year. On an absolute basis, FY 2018 will see more than about 155,000 more denials than FY 2016. 

This year has seen the highest denial rate of the years for which data is available since FY 2013 (see Table 1 below). Denial rates increased from FY 2016 to FY 2018 in 19 of the 26 benefits categories for which the information was available for all years. These include the most important benefits categories like those for requesting foreign workers, applying for green cards, and asking for authorization to work or travel.

Figure 2: Total Denials for Immigration Applications
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Most dramatically, the rate of denial increased for advanced parole from 7.2 percent to 18.1 percent (Figure 3). Advanced parole gives immigrants on temporary statuses advanced permission to reenter the country after a temporary departure abroad. Skilled immigrants use advanced parole to travel abroad and avoid losing their pending green card applications.

Figure 3: Denial Rate for Advanced Parole Applications
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The denial rate for I-129 nonimmigrant worker petitions increased from 16.8 percent to 22.6 percent from FY 2016 to FY 2018 (Figure 4). Employers use the I-129 to request a foreign temporary worker to perform jobs in the United States. Common categories include the H-2A for agricultural workers and the H-1B for high-skilled workers.

Figure 4: Denial Rate for I-129 Nonimmigrant Worker Petitions
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The denial rate for employment authorization documents jumped 6 percent to 9.6 percent from FY 2016 to FY 2018 (Figure 5). Employment authorization documents (EADs) are awarded in a variety of contexts. USCIS approved nearly 2 million EADs in FY 2015. These include immigrants with asylum claims or adjustment of status applications pending more than 180 days. Students may work through Optional Practical Training program. The spouses of H-1B skilled workers can seek EADs in some circumstances, a practice that the Trump administration has announced plans to end.

Figure 5: Denial Rate for I-765 Employment Authorization Document Applications
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The denial rate for I-485 employment-based adjustment of status to permanent residence (i.e. a green card) rose from 5.9 percent to 7.9 percent from FY 2016 to FY 2018 (Figure 6). These applications are primarily from employees of U.S. businesses who are in the United States in temporary statuses, primarily the H-1B.

Figure 6: Denial Rate for I-485 Employment-Based Adjustments to Permanent Residence
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Family-sponsored applications were not spared either. USCIS rejected petitions for fiancé(e)s of U.S. citizens at a rate of 21 percent, up from 13.6 percent in FY 2016 (Figure 7). This is one of the only categories that saw the most significant increase in denials occur in FY 2017 rather than FY 2018. This could be based on the erroneous belief that the I-129F is more dangerous than other categories simply because the San Bernardino shooter was a fiancée of a U.S. citizen and used the K-1 visa category to enter the country. This coincidence hardly justifies cracking down on fiancées of U.S. citizens. 

Figure 7: Denial Rate for I-129 Petition for Alien Fiancé(e)
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The denial rate for I-485 family-sponsored adjustments to permanent residence (i.e. a green card) increased from 10.2 percent to 13 percent from FY 2016 to FY 2018 (Figure 8). These applications are primarily from spouses and parents of U.S. citizens in the United States in temporary statuses (or possibly no status) who are seeking to become legal permanent residents.

Figure 8: Denial Rate for I-485 Family-Based Adjustments to Permanent Residence
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Table 1 shows the denial rate for all benefit categories, but the ones above are the most common and important ones. President Trump has signed two executive orders that have been interpreted as a crackdown on legal immigrants, the “Buy American, Hire American” and “extreme vetting” orders. As I reported last year, USCIS dramatically increased the length and complexity of immigration forms last year. The agency has also made denying applications easier and has intimated that it would begin looking over the shoulders of adjudicators.

The administration is proposing sweeping new regulations that would only escalate these trends. The “public charge” rule would deny status to immigrants who the agency feels may use welfare in the future. Every immigration bill dealing with legal immigration that President Trump has endorsed would reduce the total numbers of legal immigrants. Clearly, the president’s goal is not just fewer illegal immigrants, but rather fewer immigrants of all kinds in the United States.

Table 1: Immigration Applications
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Last week I appeared on Hill.TV’s What America’s Thinking with Jamal Simmons to discuss what the public thinks about birthright citizenship. President Trump has proposed using an executive order to curtail birthright citizenship, which confers automatic citizenship on children born in the United States regardless of their parents’ nationality. Constitutional legal scholars say the president doesn’t have the authority to do this. What do Americans think about the value of birthright citizenship?

The Hill partnered with HarrisX to conduct a nationally representative survey of 1,000 registered voters November 2-3 to find out. First, the survey asked about a child born to a mother legally residing in the United States on a temporary visa: 57% said the child should be considered a U.S. citizen, 28% said the child should not be given citizenship, and 15% aren’t sure. 

What about children born to mothers residing in the United States illegally? Even still, a plurality (48%) support birthright citizenship for children born to mothers living in the U.S. illegally while 38% oppose and 14% aren’t sure. It would be interesting to see what Americans would think about children born to mothers who have a Green Card, but are not yet full citizens of the U.S.

HillTV_BirthrightCitizenship_1

Republicans’ opinions on birthright citizenship are far more impacted by the mother’s legal status than Democrats’ opinions. Sixty-two percent (62%) of Republicans oppose birthright citizenship for children born to mothers in the country illegally; however, opposition declines by 20 points to 45% opposed if the child is born to a mother in the U.S. on a temporary visa. Conversely, 18% of Democrats oppose if the mother is in the country illegally and 14% oppose if the mother has permission to be in the country. Thus, when thinking about birthright citizenship, Republicans tend to care more about the legal status of the parents than Democrats do. 

These results are consistent with a Pew Research Center poll that finds 57% of Americans oppose “changing the Constitution” such that children of illegal immigrants born the U.S. would not longer be considered citizens. 

Birthright_Chart2

On the program, I explained that birthright citizenship has become core to America identity and something that bolsters American exceptionalism.

Many argue that birthright citizenship is a major reason the United States has been so tremendous at assimilating immigrants from many different places. Since the country’s founding, America has successfully absorbed waves of German, Irish, Italian, and Polish immigrants, among many others. Today the U.S. continues to do so with new immigrants coming from Central and South America, East and Southeastern Asia, and Africa.

Further, birthright citizenship has distinguished the U.S. from many European counterparts who have not assimilated immigrants as well into their societies. Many European countries have primarily conferred citizenship to the children of current citizens, rather than to children born within their nations’ borders. For instance, it was only in 2000 that Germany allowed children with non-German parents to acquire citizenship if at least one parent had legally resided in the country for 8 years and if the child demonstrated a link to Germany such as attending or graduating from German schools. 

Why might birthright citizenship help with assimilation? Citizenship not only confers rights and benefits upon its citizens but also places duties upon them. With citizenship comes the implicit duty to be loyal to the country’s principles and values which encourages integration within the broader American community. Francis Fukiyama points out in his excellent book Identity: The Demand for Dignity and the Politics of Resentment, that before Germany liberalized its immigration laws in 2000, there could be second- and third-generation children of Turkish immigrants, born in Germany, speaking perfect German, and having never been to Turkey, and still not be considered German. Yet, ethnic Germans living in the former Soviet Union who spoke no German could be naturalized. It’s not hard to see why a child of Turkish immigrants might feel isolated and excluded from their surrounding community under such a regime.

It may be that Americans have observed the success of birthright citizenship in successfully integrating many immigrants from differently places, including their own grandparents, or great-grandparents and so on, into the American community. It has led most Americans to accept the notion that “we are a nation of immigrants.” This historical memory may help explain why most Americans continue to support birthright citizenship today.

President Trump signed an order last week that bans asylum to people crossing the southwest border, but it exempts all migrants who “present themselves for inspection at a port of entry.” This provokes the natural question—why wouldn’t they all just do that? The answer is that without any public announcement, the government capped the number of asylum seekers that it will admit legally.

This policy is clearly in violation of the statute, which states that anyone can apply for asylum at a designated port of arrival (or anywhere else they want). More importantly, Congress specifically left the asylum category without a cap. This is different than nearly every other type of immigration, including refugees, which have limits. Indeed, there used to be a quota on how many asylees could adjust status to legal permanent resident status, but Congress repealed even that in 2005.

Congress unequivocally wanted no limits on asylum, yet the government has created one anyway. Homeland Security Secretary Kirstjen Nielsen told Fox News that the government is “metering” at ports of entry, limiting the number it will take in. When confronted about this at a press conference, she incoherently said both that they weren’t “turning away” asylum seekers but that they were telling them to go away and “come back.”

Internal documents released as a result of a lawsuit show that the Department of Homeland Security (DHS) told ports of entry that “if you determine that you can only process 50 aliens at a time, you will request that the [Mexican government] release only 50. If [Mexico] cannot or will not control the flaw, your staff is to provide the alien with a piece of paper identifying a date and time for an appointment and return [them] to Mexico.” It is illegal to return someone who has a credible fear of persecution.

DHS has stationed its agents at the exact U.S.-Mexico borderline in front of the port of entry, pushing anyone coming to request asylum legally back into Mexico. If immigrants make it onto U.S. soil, that’s supposed to entitle them to a hearing. But even when they cross the official line, officers ignore their pleas and tell them to go away. Trying to walk past them is a criminal offense.

In October 2018, the government admitted 4,177 asylum seekers in family units—that is 135 people daily—at ports. Across 48 U.S.-Mexico ports of entry, that amounts to 2.8 family units daily at each port. The most family units allowed at ports per day during the Trump administration has been 3.8. The unpublicized limit is then an average of between 2.8 and 3.8 per day.

Human Rights First researchers have reported that the government is currently admitting 2 or 3 families per day at certain entry points in recent days, though it may be more or less on any given day. But at the current average rate, it would take about 3 years for the administration to process at ports all the families who crossed between ports of entry in 2018.

Remember that these individuals are people who the government is telling to live homeless in a country that is not their own. In June, the New York Times reported that asylum seekers turned away at ports had to live on the Mexican side of the border for weeks, sleeping in “squalid” conditions and enduring 100 degree days. “We depend on strangers for food, for water, for everything,” one said. “I wanted to do everything legally, to ask for asylum in the proper way, but this is a setback I did not expect for us.”

Another told the Atlantic that she crossed the border illegally with her daughter solely because they “were turned away by U.S. Customs and Border Patrol at the Paso del Norte port of entry.” In other words, the policy encourages otherwise law-abiding people to break the law. Once they cross, their asylum claim is finally heard. Border Patrol arrested her and took away her daughter, while the Department of Justice criminally prosecuted her.

DHS complains about a lack of “resources” to process asylum seekers, which force it to turn away people at ports. But this claim is baseless. For one thing, its policy results in them needing to arrest, detain, and prosecute the tens of thousands who cross illegally between ports of entry—which the president’s memo admits is more expensive.

Moreover, the ports process more than a half a million people every day, a few hundred asylum seekers would barely be noticed. In any case, the Immigration and Naturalization Service had far fewer resources than DHS does today when Congress passed the asylum statute, and it didn’t include a “resource” exception.

President Trump’s policy is a fraud. He is simply pretending that legal ports of entry are valid options for asylum seekers when, in fact, his administration has closed them down.

The state of Indiana wanted to expand beach property available to the public along the shoreline of Lake Michigan. Much to its irritation, the beach property was already owed by many other people, as natural extensions of their homes. Indiana could have used its power of eminent domain to pay for this property. Instead, the state attempted to take the beach property without just compensation by abusing the common-law doctrine of “public trust.”

In Gunderson v. Indiana, Cato now joins the National Association of Reversionary Property Owners and two other organizations on an amicus brief supporting the property owners’ request that the Supreme Court review this practice.

The “public trust” mechanism for Indiana’s machinations was once used by kings to control public waterways. In ye olden days, kings would assume authority over waterways abutting private property to ensure that navigation and fishing could continue at a relatively uniform pace. The Indiana bureaucracy and courts reformulated the rule to extend the “trust” upwards from any actual water to the “high water mark” on the sand. This meant that even if a house had a private section of beach behind it, if the water had at some time risen upward, the property was now forfeit to the government.

This is a perversion of the “public trust” doctrine and a misreading of the common law, which preserved private property rights both by adhering to uniform decisions over time and by clearly defining what rights people could expect in their property. The “public trust” doctrine was used only to give the sovereign control over waterways for navigation and fishing. It never extended to beaches—and certainly was not meant to deprive private parties of their reasonable expectation to their own property. For the Indiana courts to invoke that power in this context is to steal property under the guise of an ancient protector.

This redefinition is a taking by any other name: what once belonged to a person now belongs to the state. And a taking, by any other name, still requires payment under the Fifth Amendment’s Takings Clause. The Supreme Court has long recognized that states attempt takings without directly invoking their powers of eminent domain. These “inverse condemnations” often come in the form of physical invasions—such as the government’s putting objects on the people’s property—or in regulations. The regulations here may not have been so wide as to deprive the owners of all their land, but the wound to their interests is still there.

The lower courts don’t have the right to kick sand in the face of Fifth Amendment and then hide behind the common law. State and local officials may wish they could step into the place of benevolent kings, but their attempts to do so here show them to be despots.

Having considered, in two previous essays, the origins, legality, and adverse consequences of the Scottish bank suspension, we’re now ready to ask whether, and in what ways, that episode compels us to reconsider the virtues of free banking, both as practiced in Scotland and in general.

If the Scottish bankers were indeed guilty of “violating the property rights of their depositors and noteholders,” as Murray Rothbard and some others charge, does that mean that it’s not legitimate to treat the Scottish episode as an example of the advantages of freedom in banking? Does it mean that free banking on a fractional-reserve basis is inherently unsustainable?

The Bank Notes Act of 1765

To answer: yes, the Scottish suspension does suggest that in important respects the Scottish system was not an ideal example of the nature and advantages of freedom in banking. But no, it doesn’t follow that fractional-reserve based free banking is inherently flawed.

Why not? Because the Scottish banks’ less-than-fully satisfactory response to the Bank Restriction, including both their violation of customer’s property rights and the harm that arose from it, might have been avoided altogether had it not been for two regulatory restrictions imposed upon the Scottish banks by Parliament several decades earlier, as components of the Bank Notes Act (Scotland) of 1765, the full title of which is “An Act to prevent the inconveniences arising from the present method of issuing notes and bills by banks, banking companies, and bankers, in that part of Great Britain called Scotland.”[1]

Although the 1765 Act recognized the right of both banking corporations (“chartered banks”) and private banking partnerships (“provincial banks”) in Scotland to issue circulating banknotes, it curtailed their note-issuing abilities in two important ways. It outlawed notes having a face value of less than £1 (or 20 shillings). And it outlawed notes bearing “optional” (or “option”) clauses allowing their issuers to defer their redemption for up to six months, with compensation consisting of a 5-percent interest on the unpaid sum, based on the actual length of the delay.

That these two regulatory impositions, rather than any inherent feature of free banking (including the practice of fractional reserve banking) were the ultimate cause of those blemishes that marred the record of Scottish free banking during the Bank Restriction is readily seen by reviewing  the nature of those blemishes. These consisted, once again, of (1) the Scottish bank’s own decision to suspend, which contravened their still-standing contractual obligation, as emblazoned upon their notes, to redeem those notes in specie on demand; and (2) the distress borne by Scottish citizens in consequence of no longer being able to convert banknotes into equal nominal sums of gold and silver coin.

The Small Note Ban

Regarding the second item, the distress in question was, as I noted in my previous post, almost entirely due to a sudden want of small change. The point is made especially clear in Andrew Kerr’s (1884) History of Banking in Scotland (pp. 106-7). “One of the most distressing features of the situation,” he writes concerning the state of things in Scotland at the onset of March 1797,

was the want of small currency. For sums of £1 and upward the bank notes were still available, but for smaller sums there was no medium of payment. The commonality, and indeed the whole community, were thereby placed in a most painful situation. Tradesmen could not pay wages, and small purchases could not be made. People resorted to the expedient of tearing £1 notes into halves and quarters, a practice which appears to have been tacitly recognized by the banks.

As we’ve seen, the situation improved dramatically after Parliament passed an Act that month  again allowing Scottish banks to issue notes of less than 20s, albeit for a limited period only, whilst indemnifying any bank that had resorted to issuing small notes before the emergency measure became law. Although this temporary relaxation of the Scottish small-note ban was originally supposed to expire on May 15th, 1797, a subsequent Act continued it until the 5th of July, 1799, after which the Scottish public’s needs were met by a combination of new British copper coin and silver Bank of England tokens.

Suspension by Contract

If much of the harm done by the Scottish bank suspension could have been avoided had it not been for the 1765 Act’s ban on small notes, the violation of property rights that the suspension itself entailed might itself have been unnecessary had Scottish banks still had recourse to notes bearing option clauses. In that case, the Scottish banks might have responded to the Bank Restriction simply by exercising their right to invoke those clauses. Indeed, as Tyler Goodspeed explains in his fine Harvard University Press book, Legislating Instability: Adam Smith, Free Banking, and the Financial Crisis of 1772 (p. 34), although certain Scottish banks first began including option clauses on their notes as means for protecting themselves against note redemption “raids” staged by rival banks, the main purpose such clauses served in practice before they were outlawed was that of protecting Scottish banks against English and other arbitrageurs “seeking to profit from the price differential between English and Scottish Bills of exchange.”

A distinct advantage of the option clause was that bankers could employ it with discretion against arbitrageurs whilst continuing to meet other note holders’ requests for specie. “Far from providing an easy means for suspending payment,” Goodspeed adds, the option clause “was conceived precisely to avoid the necessity of suspending payment by allowing for the threat of discriminate and orderly suspension” (ibid., p. 35). Because invoking the clause meant marking specific notes and then having to pay interest to their holders at 5 percent, which was also the maximum rate allowed by British usury laws, solvent banks had no incentive to resort to the clause except when faced with a genuine emergency. An insolvent bank, on the other hand, would be better-off closing its doors than invoking a clause that would only add to its total losses. In short, according to modern jargon, notes bearing optional clauses embodied “incentive-compatible” contracts — contracts that were in the interest of banks and their ordinary customers alike.[2]

Had option clauses remained in use in Scotland at the time of the Bank Restriction, the presence of those clauses alone would have done much to avert runs on Scottish banks, together with the panic that ensued once those banks announced their decision to altogether case paying out silver and gold. Note holders with ordinary requests for specie might then have had their needs accommodated, while others would have to decide whether it was worth waiting up to six months to have their marked notes redeemed. The delay would, in the meantime, have given Scottish bankers all the time they needed to acquire gold on the London market.

Blame the Bankers, Not Freedom in Banking

So it seems that the Scottish banks, far from having abused their freedom to victimize the Scottish public, were themselves innocent victims of Parliamentary encroachments upon that freedom.

Alas, the truth isn’t quite so simple. For it was Scottish bankers themselves who lobbied for, and got, the restrictions included in the 1765 Bank Act. The bankers were themselves to blame, in other words, for the fact that they were inadequately prepared to meet the crisis of February 1797, or were prepared to meet it only by both breaking the law and having the Scottish public go begging for small change.

The story of the politics leading to the Bank Notes (Scotland) Act of 1765 is one I can’t go into in any detail here. Instead, I’ll once again refer my readers to Goodspeed, whose book tells the whole, sordid story. In brief, to quote from that work, “though the stated intent of the Bank Act was to prevent excessive issuance of paper currency, in reality its underlying purpose was to achieve precisely what it did achieve, namely, to raise barriers to entry and limit competition in the Scottish banking sector.” And far from addressing any genuine causes of instability residing in the Scottish system in the years leading to its passage, the Act ended up “substantially amplified the level of systemic risk in Scottish credit markets” (p. 61). We’ve seen the damage done by the Act’s provisions during the course of the Bank Restriction. Goodspeed, for his part, argues, convincingly, that the same provisions also contributed to the severity of the Ayr Bank crisis of 1772.

So we must, after all, place a “black mark” on the record of Scottish bankers. But the mark belongs, not next to the entry for 1797, but next to that for 1765. More importantly, although it is a black mark for the Scottish bankers, it is not one for the principle of freedom in banking, which remains, so far as the events we’ve been considering are concerned, unsullied.

Nor ought it surprise us, finally, that Scottish bankers should themselves have conspired to adulterate what was in most other respects a shining example of the benefits of free trade in currency and banking. “People of the same trade,” Adam Smith famously observed, “seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.” It’s the responsibility of government, rather than of businessmen, to keep trade free, and competition open, and to keep them so whether businessmen like it or not.

_______________________
[1] Although most of its provisions had long since become inactive, this Act remained among the statutes until 1993, when it was finally repealed.

[2] For more on incentive-compatible contracts allowing banks to suspend payment in emergencies see Gary Gorton, “Bank Suspension of Convertibility” and George Selgin, “In Defense of Bank Suspension.”

[Cross-posted from Alt-M.org]

This is Part I in a two-part series in which I address the argument that: 1) index funds are seizing an outsized influence over publicly traded corporations, and 2) that they are wielding this influence so as to reduce intra-industry competition between firms in their portfolio. In this post, I summarize the argument and offer some criticisms as to why this influence may not be as significant as it appears. In Part II, I will proceed to argue that, to the extent that index funds have indeed acquired some influence over the firms in their portfolio, this may in fact be a salutary development.

I. “Common Ownership” and Anti-Competitiveness

Over the past two decades, “passive” funds which maximally diversify their portfolios by investing in an entire market index (e.g. the S&P 500) have acquired an increasing percentage of the total shares traded on these indexes. Such funds are passive insofar as they merely track the market as a whole, vs. actively managed funds which conduct market research so as to invest in undervalued firms and to short overvalued ones, thereby earning “alpha” (above-market returns). Yet the fact that just three index funds: Vanguard, BlackRock and State Street (the “Big Three”) represent a dominant share of the index fund industry, which is itself a rapidly growing portion of the overall stock market, has raised concerns over the influence which this concentration confers to these funds’ managers.

Three recent academic articles in the law and economics discipline outline the dangers posed by this emerging paradigm. John C. Coates and Einer Elhauge of Harvard University Law School have published, respectively, The Future of Corporate Governance Part I: the Problem of Twelve (2017) and Horizontal Shareholding (2016). These pieces are joined by Richard Posner, Fiona Scott Morton, and Glen Weyl’s A Proposal to Limit the Anti-Competitive Power of Institutional Investors (2017).

This hand-wringing has leaked out of the ivory tower. These analyses have formed the basis of popular news coverage, “The Dark Side of Mutual Funds” - Slate, 2015; “Rise of Institutional Investors Raises Questions of Collusion”- New York Times, 2016; “Are Index Funds Evil?” - The Atlantic, 2017. In 2016, the antitrust division within the Department of Justice cited this research in expressing its interest to seriously investigate the issue.

The tone of this coverage is redolent of Progressive Era descriptions of an economy dominated by trusts and oligopolies, wherein a small coterie of businessmen exerted a malign, sub rosa influence on the wider economy at the expense of the rest of us. And just as that narrative generated enthusiasm for political remedies including the Sherman Antitrust Act, the Clayton Act, and a Federal Trade Commission, so all three of these academic pieces - and their amplificatory media appearances - explicitly argue for either new legislation or the novel application of extant legal mechanisms (e.g. Section 7 of the Clayton Act) to address this growing threat.

Their argument proceeds as follows: first, we observe the straightforward fact that an index fund is often the plurality shareholder (over two-thirds of all >5% equity stakes are held by one of the Big Three) in one of its portfolio firm’s stock, and together index funds frequently constitute a 15-20% stake in a given firm. This institutional position confers influence over a firm’s important strategic decisions, either via formal governance mechanisms such as shareholder votes on resolutions, managerial pay and board composition, or via informal consultation with management.

For Coates, this amount of influence wielded by so few hands (the eponymous Twelve) is concerning in and of itself. For Elhauge as well as Posner, Morton and Weyl, this influence is not malignant per se, but becomes so when coupled with the fact that these index fund managers have incentives which are at odds with not only the other shareholders of any given firm in their portfolio, but with the broader economy. Because an index fund is simultaneously invested in all of the major, publicly traded firms in a given industry, its incentive is not to maximize the share value of any given firm in that industry, but to maximize the aggregate share value of the entire industry. In a refashioning of the cross-shareholder models best explicated by anti-trust scholars Salop and O’Brien (2000), itself predicated on the intuitions Cournot oligopolistic competition, these papers argue that index funds will pursue the tried-and-true profit-maximizing strategy of suppressing intra-industry competition, and will leverage their institutional influence as dominant shareholders to select for compliant, unaggressive management for this purpose.

An article in the Fall 2018 issue of Regulation does an excellent job of criticizing the methodology and mechanisms undergirding the empirical evidence for the anti-competitive effects of “common ownership”. In this post, I aim to complement Lambert and Sykuta’s economic analysis by highlighting the ways in which the “common ownership” paradigm makes key mistakes in its assumptions about the nexus of corporate governance relationships which exists between index fund managers, portfolio firm managers, and minority shareholders. I will dispute both component claims: 1) that index fund managers wield an outsized influence over the firms in their portfolio, and 2) to the extent that they do wield influence, its net effect on the economy is negative.

II.  Index Fund Managers- Influence or Impotence?

All three articles argue that index fund managers will exercise their formal control rights qua shareholders to great effect. Shareholder resolutions, managerial compensation, and other significant governance questions are frequently decided by shareholder vote, and in this capacity index fund managers often do have a numerical advantage vis-a-vis any other single shareholder. Coates notes that even when they fall far short of a controlling bloc, index funds, either individually or as a group, often constitute the median voter, whose support is definitionally required for a resolution to succeed. This swing-vote role becomes particularly important when a contest for corporate control itself is at stake: when the composition of the board or the management is disputed, or when a merger is pending approval. In their capacity as the pivotal voter, index funds can select managers and board members who are willing to abide the suboptimal firm values resulting from the “soft” competition practiced in pursuit of intra-industry collusion.

Beyond the formal control mechanisms exercised qua shareholders, index fund managers are also capable of exerting informal pressure on the firms in their portfolio via “engagement”. Coates is worth quoting at length:

A second channel of influence is through what institutional shareholders call “engagements.” Their staffs “meet” – sometimes in person, more often by phone, sometimes just by email – with representatives of their portfolio companies. Through these meetings, they try to influence management, by informing them of their policies, their approach to new issues, and their perceptions of management and how it is responding to corporate challenges. These engagements can last a few minutes, or a few hours. Even if the out-of-pocket cost of an engagement is quite low, the impact of the information provided during the engagement have important effects on portfolio companies, as amplified through the managers of that company. That is because the engagements provide important signals to managers as to how the investors will behave should votes come up, on issues, or on other matters, including control contests, activist campaigns, or mergers. The prospect of such events – and the power of index providers in those events…provides a powerful incentive to portfolio company managers to respond to the desires, however economically expressed, of the index provider agents.

We can draw on a basic tenet of organization theory: the choice of exit vs. voice (Hirschman 1970), to demonstrate how proponents of the “common ownership” paradigm have overstated their case for index fund influence. Members of an organization may affect said organization’s decisions via formal voting mechanisms, informal pressure and persuasion (voice) or they may leave (exit). Exit not only has compositional effects by shifting the median voter of the remaining members, but may be exercised as a threat to induce cooperation. While the authors here outline two plausible mechanisms whereby index fund managers may possess a loud voice over a firm’s corporate governance decisions, they omit in their analysis the index funds’ unique weakness as investors: they cannot choose to exit (that is, sell) a firm’s stock if they disagree with its management. Because the voice and exit strategies are complementary, index funds’ lack of a credible exit threat makes their voice less stentorian than it at first appears.

A profit-seeking management team must appeal to the marginal, exit-capable shareholder in order to maximize share price. For the same reason that Apple doesn’t optimize its next iPhone to satisfy Apple die-hards, and Democratic presidential candidates don’t campaign on the coasts, management teams won’t be overly worried about catering to their captive shareholders.

Let’s dwell on the Apple analogy for a moment. In designing the newest iPhone, Apple may be weighing the choice between designing a faster processor or a better camera. Apple enthusiasts would value a faster processor much more highly. But the casual consumer, interested in taking the most flattering Instagram selfies, will place more value on the better camera when comparing the iPhone with the latest Samsung. Apple’s incentive, then, is to appeal to this marginal consumer. The enthusiasts, who are already willing to pay more for the iPhone than its sticker price - faster processor or not - are the inframarginal consumers. A firm’s management, with much of its own compensation tied to the firm’s share price, will be incentivized to pursue those strategies which the marginal shareholder believes to be value-maximizing, as reflected in the movement of the share price.

Deprived of the exit option, and with a precarious persuasive perch, index funds must utilize the formal component of their voice - voting in shareholder resolutions and, more importantly, control fights - to militate against a management otherwise incentivized to maximize share price. Yet even a cohesive bloc of the Big Three index funds, amounting to a hypothetical 20% stake in a given firm, will only be the median voter within a certain subset of shareholder votes. They will only be able to carry a vote in which the remaining shareholders are split more narrowly than 62.5-37.5. Within this range of sufficiently controversial choices, index funds managers, assuming they will vote cohesively, can have their way. But the “common ownership” argument means that this swing-vote role will be deployed to defend a management team, a board of directors or a major strategic initiative which will not maximize firm value. This 20% bloc can be assumed to be the only voters who are not trying to maximize firm value. Index funds will not be able to install their preferred management/directors/initiative if at least 62.5% of the profit-maximizing shareholders detect that this is not the profit-maximizing move. Even in a rational expectations model in which agents can only predict the expected value of a decision within some probabilistic distribution, nakedly non-profit-maximizing proposals will not garner the requisite 37.5% support from profit-maximizing shareholders. In the final analysis, index funds’ voice over corporate governance decisions sounds less baritone and more falsetto.

Some economists want to make it more expensive for the less well-off to enjoy a clear revealed pleasure: eating red and processed meat.

The average household in the poorest fifth of the income distribution dedicates 1.3 percent of spending towards it. That’s over double average household spending in the richest quintile. Yet meat is now a new “public health” target. Once, lifestyle controls stopped at smoking and drinking. They recently expanded to soda and even caffeine. Now, even the hallowed steak is not sacred.

Last week, a report by University of Oxford academics calculated supposedly “optimal tax rates” on red meat (lamb, beef and pork) and processed meats (sausages, bacon, salami etc.) For the U.S., the recommend rates were as high as 34 percent and 163 percent, respectively. Such taxes, the report claims, could save 52,500 American lives per year.

To an economist, this approach might make theoretical sense. If the World Health Organization is right that eating meat increases risk of heart disease, cancer, stroke and diabetes (in some cases, very much disputed claims), then consumption could increase healthcare costs. Some of these costs will be borne by others, through higher government spending or healthcare premiums. Imposing a tax equal to the true external costs of the next steak, lamb chop or burger patty one eats forces consumers to face the full social costs of their eating decisions. In turn, then, the tax will somewhat reduce consumption to a supposed “optimal” level.

Yet, in reality, the presence of external effects is no slam-dunk to justify taxes. One must also consider costs, unintended consequences and the ability of government to assess risk and harm accurately. In these areas, the meat tax advocates appear off-base. The result is their proposed tax rates look way too high, even in theory, and it’s doubtful they are the best means of improving economic welfare.

First, the methodology appears to add up healthcare costs from extra meat consumption as if they are all costs imposed on others. But at least part of extra healthcare or medication costs of meat-eaters affected by disease would be personally financed, rather than funded through higher insurance premiums, or Medicaid or Medicare spending.

Second, the researchers seemingly ignore the health consequences of alternative foodstuffs. If taxes discourage eating red and processed meat, consumers will eat other things, as the report acknowledges. Yet the federal government’s own 2015-2020 Dietary Guidelines for Americans recommends we eat less fat, and the evidence is now strong that carbohydrates are dangerous, so—apart from white meat, vegetables and nuts—the government clearly thinks there are adverse health consequences of other foods. Yet this analysis does not consider the costs of this new consumption.

Third, even if more people lived healthier, longer lives as a result of this tax, this is not costless. In fiscal terms, they would receive more in Social Security or Medicare payments. If taxpayer costs of eating habits justify new taxes, then fiscal savings arising from mortality induced by meat-eating must also be considered against it. Yet public health campaigners seemingly calculate optimal taxes as if the alternative to lifestyle-induced illness is costless.

Finally, the paper adds “lost productivity” for working-age people as an external cost of poor health induced by meat-eating. Yet someone spending time out of the labor market due to illness would likely see resulting worse compensation. Any lost productivity for the working-age meat-eaters then will overwhelmingly be a private cost, rather than an external cost that needs accounting for through the tax.

Correcting for all this would see the supposed “optimal tax rates” fall dramatically. Yet even then, meat taxes would be highly regressive. In his 1937 book The Road to Wigan Pier, George Orwell commented that the poor eat “an appalling diet, but the peculiar evil is this, that the less money you have, the less inclined you are to spend it on wholesome food … You want something ‘tasty’.” Meat is a tasty pleasure, and governments should be wary of policy demonizing it.

In reality, sin taxes are rarely “optimal” anyway. Taxes are applied uniformly. Yet those who eat meat in healthy moderation impose no costs on others, but see the same cost uplift for a sausage as someone at high risk of requiring taxpayer healthcare support. Truly efficient taxes would recognize the differences in risks of types of consumers.

This all suggests a more effective approach would be targeted dietary guidance at a personal level. But the history of food science itself is littered by examples of governments sharing subsequently mistaken advice. On that basis alone, it is far too soon for governments to tax a whole major food group on the basis of speculative modelling and disputed science.

In any case, the history of lifestyles interventions suggests a sin tax on meat would be the thin end of the wedge. This research suggests, unbelievably, that 557,000 deaths per year in the U.S. are caused by red and processed meat consumption – over 20 percent of the total. One of its authors has previously suggested everyone must eventually go vegan.

With such figures bandied about, campaigners would not want to stop with a modest tax to account for external costs of consumption. Instead they would swiftly move on to try to fundamentally change eating habits using many other policy levers, from advertising bans and packaging regulations, through to higher taxes and restrictions on sales.

The author would like to thank Terence Kealey for his input to this post.

The high hopes and inflated expectations of U.S. diplomacy with North Korea set by Donald Trump after his summit with Kim Jong Un are quickly coming unraveled.

Trump confidently declared an end to the nuclear threat from North Korea on the heels of the Singapore summit, and has since repeatedly declared that the United States is making progress in its efforts to denuclearize North Korea.

However, many arms control and nuclear experts have warned that the actual substance of the agreement between the United States and North Korea leaves much to be desired. North Korean promises to denuclearize are vague at best and there is no real system in place for verifying the few steps Pyongyang has already taken, such as dismantling an engine test stand and closing its nuclear weapons testing site. While Kim declared a moratorium on ballistic missile and nuclear testing, he has not agreed to give up any missiles or warheads. In fact, in his New Year’s address he explicitly stated, “The nuclear weapons research sector and the rocket industry should mass-produce nuclear warheads and ballistic missiles.”  

There is a clear mismatch between Trump’s optimistic rhetoric and the actual state of U.S.-North Korea diplomacy. The North’s commitments are fuzzy at best and talks appear deadlocked as both sides refuse to budge until the other makes a concession. The discrepancy between rhetoric and reality risks turning unsurprising revelations about North Korea behavior into indictments that could sink U.S.-North Korea talks.  

One such unsurprising revelation that, thanks to Trump’s statements, is instead a politically potent cudgel is the news that North Korea has continued operations at undeclared missile bases while it has negotiated with the United States. This should not come as a surprise. None of the agreements North Korea has reached with the United States (or South Korea) since the start of 2018 mention anything about halting all missile operations. Furthermore, neither Kim’s New Year’s address nor his April speech to top officials in the Worker’s Party of Korea says that operations will cease.

However, Trump’s wildly inflated statements of success and victory mean that instead of a reasonable and measured reaction, media outlets are treating the news of ongoing operations at missile bases as a sign of North Korean perfidy. The New York Times, for example, said that the satellite imagery and report published by the Center for Strategic and International Studies (CSIS), “Suggest that the North has been engaged in a great deception.” The article makes no mention of the fact that Kim has never stated or agreed to a complete freeze or abandonment of his ballistic missile capabilities, but it does contrast the North’s behavior with Trump’s optimistic rhetoric.

Keeping a watchful eye on North Korea is valuable and important, and the CSIS report itself is detailed and objective. However, thanks to the unrealistically high expectations Trump set at the outset of talks, the report is being spun as a black mark against Trump’s approach to North Korea. This unfortunate outcome could have been easily avoided. Trump should have been honest about the limits of the agreement penned at Singapore, and he should have heralded the summit as the start of a long process rather than a kind of finish line.

U.S.-North Korean diplomacy isn’t dead yet, but it faces some tough sticking points that will take time to resolve. Revelations that North Korea is moving ahead with activities that haven’t been explicitly limited or proscribed shouldn’t come as a surprise and shouldn’t be an excuse for the United States to walk away from the table.

It’s possible for Trump to achieve significant, long-lasting results via negotiations, but in order to do that he needs to set realistic expectations and tone down the triumphalist rhetoric. Continuing to declare victory without real results will only turn run of the mill news about North Korean behavior into the ammunition that hawks within the administration need to sink negotiations.

Yesterday marked 100 years since the end of the First World War. The Washington Post’s Monkey Cage blog used the occasion to publish an excellent commentary, based on a longer academic journal article, by political scientists Alexander Lanoszka and Michael A. Hunzeker. They argue that the Great War could have actually ended long before the eleventh hour of the eleventh day of the eleventh month of 1918. Two years earlier, in December 1916, both “Germany and the United States issued peace overtures” that, if heeded, “could have spared countless lives and have helped Europe escape the financial ruin and deep-seated animosity that produced World War II,” Lanoszka and Hunzeker explain. “Unfortunately, the Entente — Britain, France and Russia — dismissed both offers, and the fighting continued.”

At the time, all sides were facing catastrophic losses, financial insolvency, and a virtual stalemate on the battlefield. An armistice then would have been a great relief to the warring parties. So why did the Entente powers reject peace? According to Lanoszka and Hunzeker, “Honor pushed the Entente to prefer war over peace despite the overwhelming costs and risks…[For the Entente,] Honor was worth the material price, no matter how high. Germany was unapologetic about its transgressions. Atrocities in Belgium and repeated frustrations on the battlefield to win and exact punishment made national honor take priority over national survival. War aims expanded; by December 1916, the Entente came to believe the only way to overcome dishonor was to destroy the German regime itself.”

Sociologists argue that honor is crucial to group self-esteem, involving an emotional investment in how groups define themselves and their place in social hierarchies. Honor leads actors to believe that others must respect these identities. It can enhance cooperation when mutual respect exists, but encourage severe escalation and undercut conflict resolution when it does not.

Accordingly, when identity faces an external threat, actors feel an intense psychological need to salvage their honor. To restore besmirched honor, either the transgressor apologizes or the victim punishes. The longer the transgressor refuses to apologize and resists punishment, the more the victim will dig in and perhaps even risk dying for honor’s sake.

Threats to honor can thus undermine rational behavior and make wars longer. Rationality means that an actor objectively assesses available information, selects which goals it will pursue and picks the most efficient and risk averse way to do so. However, when honor is at stake, leaders might begin to ignore disconfirming evidence, prioritize honor over survival and adopt strategies based on hope, not efficiency.

Honor is not “a relic of a bygone era in international relations,” the authors conclude. Indeed, it is still very much with us. I recently published an article in The Washington Quarterly arguing that concerns over America’s honor, status, and prestige discourage a much-needed shift in U.S. foreign policy away from the costly and counterproductive grand strategy of primacy and toward retrenchment. As the American diplomat James B. Foley put it, “public support for U.S. global leadership [since WWII] has been sustained by a romantic faith in America’s overseas mission – a kind of internationalized Manifest Destiny” that makes any suggestion of retrenchment “psychologically deflating.” Decision-makers thus remain committed to an extraordinarily activist foreign policy despite the dire costs, high risks, and the fact that America’s core security would remain intact with a much less ambitious set of strategic objectives. 

In Paris this weekend, world leaders commemorated the centennial. French President Emmanuel Macron rebuked  the brutish nationalism of the early 20th century that helped lead to the bloodbath, while indirectly (though not subtly) condemning President Trump’s hardline nationalist worldview as a dangerous throwback to that tragic era. Sure enough, Trump is very much preoccupied with honor and prestige, and it shows in his foreign policy. Much has been made of how well Trump fits into the “Jacksonian tradition” in U.S. foreign policy. According to the political scientist Walter Russel Mead, who coined the term in his 2001 book Special Providence, the Jacksonian tradition features “a deep sense of national honor” that “must be acknowledged by the outside world” and must be defended, including by going to war over “great things and small.” 

Trump rose to power complaining about “a tremendous lack of respect for our country,” a phrase he repeated countless times on the campaign trail. The sentiment reaches back decades. In a 1988 interview, when asked what his political platform would be should he run for office, Trump boiled it down to a single word: “Respect.” He added that our adversaries are “beating us psychologically, making us look like a bunch of fools.” Even more explicitly, in a 1990 interview with Playboy magazine, Trump explained that America was “suffering from a loss of respect,” adding that “people need ego, whole nations need ego. I think our country needs more ego” because our leaders have let other countries “literally out-egotise this country.”

“The key to understanding Trump’s foreign policy outlook,” according to the political scientist Reinhard Wolf, “lies in his extreme attention to symbolism,” where “questions of substance are eclipsed by an obsession with status and respect…[F]or Trump, America First is not so much about advancing the national interest measured in terms of material wealth or physical survival. It is, first and foremost, about the United States becoming the undisputed ‘number one’ again, and being treated with due respect.”

Critics of Trump’s foreign policy often decry his supposedly isolationist impulses and his withdrawal from the world stage. However, though the administration has pulled out of several international agreements, America’s global military commitments have not shrunk. In some ways, Trump has expanded them. He has overseen increased military spending, the expansion of NATO, higher troop deployments to Europe and the Middle East, and a less restrained use of air power and other uses of force in multiple countries under dubious legal authority. Trump has not withdrawn from a single one of America’s 60-plus security commitments and, despite a near universal regonition that the war in Afghanistan is unwinnable, he has surged troops there to finish an unachievable mission. 

As with the Entente powers, intangible psychological motivations are driving U.S. militarism at the expense of more material economic and security interests. In 1916, that cost Europe dearly. In 2018, it’s costing America dearly, too. 

The naming of Matthew Whitaker as acting head of the Department of Justice, following the forced resignation of Attorney General Jeff Sessions, has kicked off a mini-debate between legal scholars over the propriety of his appointment.  On Thursday, Neal Katyal and George Conway argued in The New York Times that Whitaker’s elevation ran afoul of the Constitution’s Appointments Clause, which requires that the president appoint “principal officers” of the United States, such as the Attorney General, only with the “advice and consent” of the Senate.  John Yoo, a conservative legal scholar who served at DOJ under the Bush Administration, told Axios he agreed, and that the Federal Vacancies Reform Act, which purports to authorize the appointment of unconfirmed interim officers to fill vacancies, was unconstitutional as applied to such “principal” offices.  Supreme Court Justice Clarence Thomas expressed a similar view in an opinion just last year.  On the other side, we have Steve Vladeck, a law professor at the University of Texas, who notes that the Supreme Court blessed temporary appointments without confirmation back in 1898, in United States v. Eaton.  

I’m not sufficiently steeped in the history or jurisprudence of the appointments clause to have a strong view either way on the legality of Whitaker’s elevation, but it does at least seem to run contrary to the spirit and intention of the Appointments Clause as articulated by Alexander Hamilton in Federalist 76, which gives the following rationale for requiring Senate confirmation for the highest posts in the executive branch:

To what purpose then require the co-operation of the Senate? I answer, that the necessity of their concurrence would have a powerful, though, in general, a silent operation. It would be an excellent check upon a spirit of favoritism in the President, and would tend greatly to prevent the appointment of unfit characters from State prejudice, from family connection, from personal attachment, or from a view to popularity. In addition to this, it would be an efficacious source of stability in the administration.

It will readily be comprehended, that a man who had himself the sole disposition of offices, would be governed much more by his private inclinations and interests, than when he was bound to submit the propriety of his choice to the discussion and determination of a different and independent body, and that body an entire branch of the legislature. The possibility of rejection would be a strong motive to care in proposing. The danger to his own reputation, and, in the case of an elective magistrate, to his political existence, from betraying a spirit of favoritism, or an unbecoming pursuit of popularity, to the observation of a body whose opinion would have great weight in forming that of the public, could not fail to operate as a barrier to the one and to the other. He would be both ashamed and afraid to bring forward, for the most distinguished or lucrative stations, candidates who had no other merit than that of coming from the same State to which he particularly belonged, or of being in some way or other personally allied to him, or of possessing the necessary insignificance and pliancy to render them the obsequious instruments of his pleasure.

 

The elevation of Whitaker to the role of acting attorney general seems as precise an instance as one could imagine of the scenario the Framers hoped to deter.  It is, after all, no secret why President Trump has been dissatisfied with Sessions: He has frequently made clear that he was infuriated by Sessions’ recusal (quite clearly required by DOJ rules) from overseeing the investigation into Russian election tampering—which has already seen legal penalties imposed on several of the president’s allies—and his insufficient enthusiasm for pursuing the president’s political adversaries.  Whitaker, formerly Sessions’ chief of staff, seems certain to be more accommodating.  He took that job only a year ago, after making a successful play to get noticed by the administration via editorials and television appearances in which he attacked Special Counsel Robert Mueller’s investigation, and asserted that he would have indicted Hillary Clinton over her private e-mail server, despite the consensus of DOJ attorneys that there was no sound basis for prosecution. Though he did serve a stint as U.S. Attorney during the George W. Bush administration, Whitaker had spent recent years running a nonprofit that produced partisan attack ads targeting Democrats.  Charitably put, his resume is a bit thin for the nation’s top law enforcement job, even in an “acting” capacity: His chief qualification for the post is being “personally allied” to Trump.  He might, under present circumstances, nevertheless muster the votes for confirmation in the Senate, but the confirmation process itself would doubtless be fraught, providing an opportunity for pointed questions about whether he’d signaled to the White House his eagerness to shut down investigations like Mueller, or pursue prosecutions of the president’s foes.  It seems quite plausible, in other words, that the Appointments Clause would have functioned as intended to deter the nomination of someone like Whitaker to head the Justice Department if he had to go through confirmation.

In the Federal Vacancies Reform Act, the White House has seemingly found a mechanism for, in effect, hacking the Appointments Clause:  Get a loyalist hired in a subordinate role to a Senate-confirmed “principal officer,” create a vacancy by forcing that officer to resign, and then promote the loyalist to the top job, circumventing the Senate for at least seven months.  Moreover, the seven-month clock is extended for the period during which the nomination of a permanent replacement is pending, and restarts if that nomination fails to win the Senate’s consent.  In theory, at least, that means Whitaker’s “temporary” leadership of DOJ could last for the remainder of Trump’s term, provided the Senate finds Trump’s nominees to replace him even less acceptable.  Given that Trump has been open about his desire to replace Sessions with a more “loyal” attorney general for more than a year, it’s even conceivable that the White House anticipated his eventual elevation back when he first joined the Justice Department.  

It’s anyone’s guess whether, in light of Eaton, the courts will balk at this circumvention of the Senate’s role in providing “advice and consent,” but if they don’t, the White House has drawn a convenient roadmap for circumventing a constitutional safeguard that seems ripe for further exploitation. 

President Trump signed an order today that requires the denial of all asylum claims from people who cross the border illegally. The most important thing to understand about this order is that it is not the beginning of a new policy keeping out asylum seekers, but the conclusion of an existing policy. Here are the steps to Trump’s asylum sham:

  • Step 1: The Department of Homeland Security (DHS) moves its agents to the exact U.S.-Mexico border line.
  • Step 2: DHS forcibly keeps asylum seekers in Mexico away from U.S. protection, letting no more than 2 or 3 families cross per day.
  • Step 3: DHS prohibits asylum claims from those who go around the port of entry to get on U.S. soil to turn themselves in and apply for asylum.
  • Step 4: Put the military on the border and have soldiers place concertina wire around the port of entry.
  • Step 5: DHS works with the Mexican government to evict homeless asylum seekers who wait in Mexico at the legal port of entry.
  • Step 6: America is great again.

These policies contradict the asylum statute (8 U.S.C. 1158) which states:

Any alien who is physically present in the United States or who arrives in the United States (whether or not at a designated port of arrival and including an alien who is brought to the United States after having been interdicted in international or United States waters), irrespective of such alien’s status, may apply for asylum.

The order pretends as if legal ports of entry will still be a viable option for people who want to seek asylum, but this is a sham. Here’s the reality. DHS is permitting no more than two or three families seeking asylum to enter at ports of entry each day. This forces them to either live homeless in Mexico for days or weeks or go around, turn themselves in to Border Patrol, and have their claim processed that way. The Daily Beast explained how this worked in a specific case:

Donelda, 35, and her daughter, 6 … are asylum seekers from Guatemala who were turned away by U.S. Customs and Border Patrol at the Paso del Norte port of entry on May 8, the day after Attorney General Jeff Sessions announced the Trump administration’s new “zero tolerance” immigration policy… . Like others who have been turned away since May 8, Donelda then tried to cross into the United States illegally, turning herself into Border Patrol. That’s when—under the new policy—she was prosecuted criminally and her daughter was taken from her and shipped to a detention center in the Midwest, thousands of miles away.

The New York Times reported on what happens to those kept out:

The bottleneck has produced a grim sight at the turnstiles where legally authorized border crossers step from Mexico into the United States. Families from El Salvador, Guatemala and Honduras huddle together on the ground near packages of donated diapers and cans of baby formula. Some have endured this limbo for nearly two weeks, sleeping on the ground at night and trying to stay cool during the day as temperatures in this outpost in the Sonoran Desert surpass 100 degrees.

“We made it here on foot and by bus,” said Justo Solval, 25, a laborer traveling with his 21-month-old son, Jonathan. They set out from Suchitepéquez in southwest Guatemala, escaping extortion gangs in an effort to request asylum in the United States, Mr. Solval said. But after arriving in Nogales about a week and a half ago, they have been sleeping on cardboard pizza boxes in a squalid entryway to a bathroom at the border crossing. “We depend on strangers for food, for water, for everything,” Mr. Solval said. “I wanted to do everything legally, to ask for asylum in the proper way, but this is a setback I did not expect for us.”

As the Atlantic explains, DHS now stations agents in the middle of bridges to prevent asylum seekers from stepping on U.S. soil, which would grant them the protections under 8 U.S.C. 1158 to submit asylum applications. Of course, even when they do appear to cross the line, as in this video from the Intercept, the agents still reject them.

DHS Secretary Kirstjen Nielsen has even told Laura Ingraham on Fox News about turning away asylum seekers:

Well, we’re ‘metering,’ which means that if we don’t have the resources to process them on a particular day, they’re going to have to come back, so they’re going to have to wait their turn, and we will process them as we can.

Yet that “turn” may not come for weeks or months or years if every family is forced to wait because, according to researchers at Human Rights First, no more than two or three families may enter any given port per day. There were nearly 161,000 people in family units who arrived at or between ports of entry in FY 2018. Nielsen later was confronted about this at a press conference and refused to admit that asylum seekers were being “turned away,” while explaining that that’s exactly what was happening. A spokesman for DHS also used this same doublespeak when explaining the policy to the New York Times.

Despite the family separation policy in May and June, families kept crossing illegally anyway—evading the blockade at ports of entry. In response to the fact that asylum seekers are avoiding the de facto ban on asylum at ports, this latest order will ban the only remaining option for them. Without any legal way to present their claims, hundreds of people are homeless in Mexico. This image naturally conflicts with the Trump administration’s messaging about how it will accept claims at ports, so what has it done? As Texas Monthly reported today:

Hours after the Trump administration invoked national security powers to change existing rules to deny asylum to anyone entering this country illegally, U.S. immigrant rights advocates in El Paso learned that immigration officials were going to start evicting migrants encamped on international bridges awaiting to legally apply for asylum. U.S. and Mexican authorities have reached an agreement to remove hundreds of asylum seekers, including children, from international bridges linking El Paso and Ciudad Juarez, representatives from the American Civil Liberties Union told Texas Monthly Thursday night… .

More than 450 would-be asylum seekers—mostly from Central America—are currently camped out on the Mexican side of three bridges linking the two cities… . The lines at the El Paso-Ciudad Juarez bridges have formed because CBP officers are preventing people from reaching the port of entry to apply for asylum, saying the port facilities lack capacity to process the number of asylum seekers now arriving.

This idea that ports of entry lack “capacity” to process 450 asylum seekers is the most absurd lie of all. The El Paso-Ciudad Juarez port of entry processes more than 50,000 north-bound pedestrians and personal vehicles every day. It is laughable to claim that 450 asylees can’t receive background checks and screenings immediately if the administration chose to. DHS could process them all, give them all ankle bracelets for monitoring them in the United States (if it wants), and be done before lunch.

The goal of the president’s new policy is manifestly just to keep out any asylum seekers at all. It’s clear that DHS intends to continue its practice of rejecting asylum seekers at ports of entry as well, as evidenced by the fact that the military is placing concertina wire around the ports of entry. This would obviously be totally unnecessary if they processed the claims at ports, and if the immigrants were trying to sneak in, they wouldn’t go to the port to begin with.

President Trump is violating the law, which was intended to protect asylum seekers in situations like the Jews on the St. Louis who were trying to enter the United States without proper documentation but whom the United States monstrously turned away. Any policy that would turn away the St. Louis—the exact situation that prompted the creation of the asylum statute—flunks the basic tests of legality and morality.

Here are numerous other cases of the illegal practice of turning away asylum seekers:

 

Just before his crushing defeat on Tuesday, Maine’s Republican Senate candidate Eric Brakey asked the following questions on Twitter:

There is much to object to here, but I’ll focus on this fact: California is not blue because of immigrants. In the 2016 election, for example, naturalized citizens cast 18.1 percent of the vote, according to the Voting and Registration Supplement to the Census’s Current Population Survey (CPS). The CPS doesn’t ask how they cast their votes, but even if every single naturalized citizen voter cast their ballot for Hillary Clinton, Trump still would have received 38 percent fewer votes in the state than Clinton if Brakey’s disenfranchisement plan went through. 

The voter registration information in the Public Policy Institute’s 2017 survey indicates that naturalized citizens in California voted about 78 percent for Hillary Clinton, 19 percent for Trump, and 3 percent for other candidates. That is definitely a significant benefit to Democrats, but as Figure 1 shows, naturalized citizens would not have affected the outcome of the election. Hillary Clinton still would have won California in a landslide. A forced exodus of every immigrant voter in California would move from a D+30 state to a D+24 state.

Figure 1: California Presidential Election Vote Share by Candidate and Citizenship Status
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Brakey might respond that this fails to consider the children of immigrants, who opponents of birthright citizenship contend are not real Americans. In 2016, there were about 1.7 million votes for president by children with two foreign-born parents, according to the CPS. We again don’t know exactly for whom they voted in 2016, and we don’t have a California-specific political identification survey for them, but using the General Social Survey party identification for all 2nd generation Americans, we can conclude that at most 63 percent voted for Hillary and 36 percent for Trump. Figure 2 shows the difference between the 1st, 2nd, and 3rd generations in California. Even without immigrants and their children, Trump still would have lost.

Figure 2: California Presidential Election Vote Share by Candidate and Citizenship Status
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Another fundamental problem with the immigration-turned-California-blue theory is that California has had a unified Democratic legislature almost continuously since 1959, so it was already a blue state. But nativists are right that something did happen in the mid-1990s that made Republicans much less competitive in statewide elections. In the three elections from 1990 to 1994, Democrats received an average of just 47 percent of the votes in statewide races for president, senate, governor, lieutenant governor, and attorney general (Figure 3). In the following three elections from 1996 to 2000, they received 54 percent. From 2002 to 2006, they fell back to 52 percent (thanks entirely to Arnold Schwarzenegger’s boost to the GOP), but Democrats’ results have shot up since, hitting 59 percent in the most recent three elections.

Figure 3: Vote Share for Democrats in California Statewide Elections
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So what happened? Immigration clearly doesn’t explain it. Republicans would still lose California without any 1st and 2nd generation Americans, let alone just those who became citizens after 1994. Taking out the net increase of 1.9 million 1st and 2nd generation voters from 1996 to 2016 would have lowered the Democratic share by just 2 percentage points in the 2016 election.

But just because immigrants don’t make California blue doesn’t mean that immigration politics didn’t play a role. California Republicans went from competitive statewide to big losers at exactly the time that Governor Pete Wilson decided to blame immigrants for the state’s budget problems and campaigned for Proposition 187 in 1994, which would have required state officers to report illegal immigrants to the federal government as well as ban public services to them. Wilson did win reelection in 1994 during a record year for Republicans nationwide, but the California GOP never recovered.

My colleague Alex Nowrasteh has documented the now-extensive evidence that Wilson’s nativist campaign turned off Hispanic voters. This includes not just naturalized but also 2nd, 3rd, and 4th generation Hispanics. Wilson received nearly half of the Hispanic vote in 1990, but only a quarter in the 1994 election, and the GOP share remained low thereafter. But it was not just Hispanic voters who stopped voting GOP. Non-Hispanic whites also turned against Republicans at the same time, leading to a near total collapse in the state GOP.

As seen in Figure 4, Shaun Bowler, Stephen P. Nicholson and Gary M. Segura document the change in party identification following Prop. 187 (1994) and its successors Prop. 209 (1996) and Prop. 227 (1998). The share of Hispanics identifying as Democrats moved from 38 percent to 63 percent, while non-Hispanic whites moved from 30 percent to 37 percent, leading to a 14 percentage point swing against the GOP among whites.  

Figure 4: Party Identification Before and After California Propositions 187, 209, and 227
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Naturalized citizens and the children of immigrants certainly contribute to Democratic Party success in California, but they are not responsible for it. If Republicans want to win in the state, they need to realize that their rhetoric and policies on immigration not only offend new immigrant families in the state but also many Americans whose ancestors came to America during earlier waves, especially when public polling shows that Americans have never been more pro-immigration than they are right now. This has made the GOP far less competitive in California, and it may also have contributed to the exceptionally close Senate race in Texas this year. Rather than blaming immigrants for their failures, Republicans who want to reverse these trends should craft inclusive messages and policies that appeal to Americans regardless of the ancestry.  

The following is an excerpt from an op-ed I wrote explaining why the 2018 midterm election will not have a significant impact on how the Trump administration conducts its diplomatic outreach with North Korea: 

A divided Congress will likely serve as a brake against most of Donald Trump’s policy agenda. But in one critical issue area—the diplomatic efforts to denuclearize North Korea—congressional divisions will not have a significant impact. For better or worse, the executive branch in general and Trump in particular will be able to deal with North Korea as they see fit.

The new Congress is bound to have some effect on Trump’s approach to North Korea, but the impact of the legislative branch should not be overstated. At the end of the day, the executive branch still holds most of the power and control over the U.S.-North Korea diplomatic process. Most of Congress’s impact will therefore be constrained to the margins of U.S. policy.

To read the rest of the article, go to NK News

https://www.nknews.org/2018/11/democratic-gains-north-korean-pains-congresss-limited-impact-on-dprk-policy/

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